NFPs Must Do More to Prepare for the Digital Age

While Not for Profits and philanthropists understand the importance of the digital age, they are still unaware of all the risks and opportunities it presents, according to a study of Australian organisations.

It also found that the lack of digital acumen was felt at governance level. Almost three-quarters, 73 per cent, of respondents said they weren’t sure or didn’t feel their board was well placed to effectively manage their digital responsibilities.  

The study of more than 120 Not for Profits was part of a three-year partnership between trust manager Perpetual and Stanford University’s Digital Civil Society Lab.

Perpetual national manager of philanthropy and non profit services Caitriona Fay said boards were failing to look at governance issues through a digital lens.   

“There’s probably a lack of understanding about what the key governance implications are for operating their Not for Profits in the digital world, and what that means for their boards in terms of the skills matrix that boards may have,” Fay told Pro Bono Australia News.

“What we’re seeing way down the list of priorities in terms of concerns and opportunities are issues related to digital data governance.

“Most Not for Profits that were responding [to the survey] either didn’t know or absolutely didn’t feel as though they had the right skills at board level to optimise the use of digital and to appropriately manage the right risks in the right way at this point in time.”

Co-director of Stanford University’s Digital Civil Society Lab Lucy Bernholz told Pro Bono Australia News the results reflected a broader trend.  

“It’s largely because so many of us fundamentally don’t understand digital data… even board members who are coming to these Not for Profits driven by an expertise in the subject matter or the issue area or a passion… or their legal expertise or their financial expertise,” Bernholz said.

“A lot of organisations, from journalism to banks to every stripe of Not for Profit, [are] just beginning to recognise that, because of our dependence on software and digital data transmission systems, everything we do now creates and leaves a digital trail.”

She said digital governance presented a challenge because it’s a resource unlike time or finances, which are the resources that boards have been structured to manage.

“They’re interested in the opportunities that this resource presents to them, but they’re either unaware yet of the risks that are aligned with that opportunity, or they’re trying to adapt,” she said.

“What most organisations have been doing, and this is across sectors, [is] trying to adapt our existing methods of governing time and money to governing data, and low and behold we’re discovering it doesn’t really answer all our questions or work as well as we’d like it to.”

The study found Not for Profits were successful at using digital tools primarily as a communication device or for fundraising. However, they weren’t looking at the implications of digital technology across all operations.

“Digital data allows us to do things at faster paces with greater numbers of people to bring together insights,” Bernholz said.

“There’s no doubt digital information has the potential to shape the way we conceive of certain social challenges, the way we understand things like food shortages or shelter needs or mental health issues.

“We have also recognised that a lot of that information is sensitive information, it’s personally identifiable information… the rules to manage that information are quickly being adapted from an age when, say, the most sensitive data a Not for Profit might of had would have been contained on paper in locked file cabinets behind a locked door at the office.

“Now it’s entirely possible that Not for Profits are accessing that kind of information on a cloud server somewhere, or partnering with other Not for Profits to work together better and so they’re using laptops to access that information, and that simple change of technological infrastructure changes the nature and the risk associated with using the data.”

She said there were two priorities for fostering better management of digital assets.

“What organisations need to do is first of all understand the resource and understand it broadly, meaning everybody… this is not the job of a single person on your staff, you don’t need a single digital expert, you need a level of digital expertise across all the functions of your organisation,” she said.

“And then a set of policies and practices rooted in the core principals of your organisation that help you decide – do we collect that data, do we store that data, do we require people to sign in to use our website, is this a voluntary relationship or a compulsory relationship.

“There’s a whole set of questions that fall out of it, but it’s basically a broad exposure to digital literacy, and a belief and commitment that this is a core resource to accomplishing your mission.”

Fay said philanthropists also have an important role to play in digital management.

“Philanthropic funders need to have a commitment to helping Not for Profit organisations go on that journey to understand the nature of the digital assets,” she said.

“That might be a commitment from funders to invest in direct organisational capacity, board development through to infrastructure support, through to utilising external expertise where necessary.

“The other side of it for the funder is funders aren’t immune to this space either, they need to be asking themselves the same questions that Not for Profit organisations who are involved in service delivery are being asked as well – what information are funders collecting, why are they collecting it, how are they using it.”